Question 1

When consumers act as price-takers,we say that they behave

Accepted Answer

A)  cooperatively. 
B)  competitively. 
C)  monopsonistically. 
D)  irrationally. 
E)  rationally. 
A)  cooperatively. 
B)  competitively. 
C)  monopsonistically. 
D)  irrationally. 
E)  rationally.

Question 2

A good is normal for a consumer if

Accepted Answer

A)  it is always consumed in a consistent quantity. 
B)  its consumption rises when income rises. 
C)  its consumption falls when income rises. 
D)  some minimal level of the good must be consumed to assure the consumer's survival. 
E)  the assumption of "more is always preferred to less" holds. 
A)  it is always consumed in a consistent quantity. 
B)  its consumption rises when income rises. 
C)  its consumption falls when income rises. 
D)  some minimal level of the good must be consumed to assure the consumer's survival. 
E)  the assumption of "more is always preferred to less" holds.

Question 3

A utility function

Accepted Answer

A)  is a stand-in for a more complicated function. 
B)  is useful only in microeconomics, not macroeconomics. 
C)  captures the preferences of the representative household over consumption and leisure goods. 
D)  captures the representative firm's ability to produce goods and services. 
E)  captures the maximum satisfaction of consumers. 
A)  is a stand-in for a more complicated function. 
B)  is useful only in microeconomics, not macroeconomics. 
C)  captures the preferences of the representative household over consumption and leisure goods. 
D)  captures the representative firm's ability to produce goods and services. 
E)  captures the maximum satisfaction of consumers.

Question 4

A utility function

Accepted Answer

A)  needs to measure the absolute level of happiness. 
B)  needs to measure relative amounts of happiness for a single individual. 
C)  helps compare the relative happiness of two separate consumers. 
D)  is most useful if it can be influenced by others. 
E)  measures relative happiness and income of consumers. 
A)  needs to measure the absolute level of happiness. 
B)  needs to measure relative amounts of happiness for a single individual. 
C)  helps compare the relative happiness of two separate consumers. 
D)  is most useful if it can be influenced by others. 
E)  measures relative happiness and income of consumers.

Question 5

That indifference curves are bowed in toward the origin

Accepted Answer

A)  is not true. 
B)  follows from the fact that more is preferred to less. 
C)  follows from the property that the consumer likes diversity in his or her consumption bundle. 
D)  follows from the property that consumption and leisure are normal goods. 
E)  follows from the fact that there is a direct relationship between consumption and leisure bundles. 
A)  is not true. 
B)  follows from the fact that more is preferred to less. 
C)  follows from the property that the consumer likes diversity in his or her consumption bundle. 
D)  follows from the property that consumption and leisure are normal goods. 
E)  follows from the fact that there is a direct relationship between consumption and leisure bundles.

Question 6

Of the following,which is the least likely example of an increase in total factor productivity?

Accepted Answer

A)  the introduction of the assembly line 
B)  the invention of the personal computer 
C)  good weather 
D)  a reduction in the relative price of energy 
E)  an educated work force 
A)  the introduction of the assembly line 
B)  the invention of the personal computer 
C)  good weather 
D)  a reduction in the relative price of energy 
E)  an educated work force

Question 7

The time constraint for the consumer is

Accepted Answer

A)  the amount of time for decision making. 
B)  expressed as leisure time - time spent working = total time available. 
C)  expressed as leisure time - sleep time = time spent working. 
D)  expressed as leisure time + time spent working = total time available. 
E)  a result of consumers' busy work schedule. 
A)  the amount of time for decision making. 
B)  expressed as leisure time - time spent working = total time available. 
C)  expressed as leisure time - sleep time = time spent working. 
D)  expressed as leisure time + time spent working = total time available. 
E)  a result of consumers' busy work schedule.

Question 8

A consumer is said to be indifferent between two consumption bundles

Accepted Answer

A)  when the consumer doesn't care about his or her consumption bundle. 
B)  when the two bundles provide equal amounts of utility. 
C)  when the consumer chooses the bundles equally often. 
D)  when the consumer is indecisive. 
E)  when the consumption bundles contain normal goods. 
A)  when the consumer doesn't care about his or her consumption bundle. 
B)  when the two bundles provide equal amounts of utility. 
C)  when the consumer chooses the bundles equally often. 
D)  when the consumer is indecisive. 
E)  when the consumption bundles contain normal goods.

Question 9

That indifference curves are downward sloping

Accepted Answer

A)  is not true. 
B)  follows from the fact that more is preferred to less. 
C)  follows from the property that the consumer likes diversity in his or her consumption bundle. 
D)  follows from the property that consumption and leisure are normal goods. 
E)  follows from the fact that there is a direct relationship between consumption and leisure bundles. 
A)  is not true. 
B)  follows from the fact that more is preferred to less. 
C)  follows from the property that the consumer likes diversity in his or her consumption bundle. 
D)  follows from the property that consumption and leisure are normal goods. 
E)  follows from the fact that there is a direct relationship between consumption and leisure bundles.

Question 10

The construct of a representative firm is most helpful in describing the behavior of all of the firms in the economy when

Accepted Answer

A)  there are constant returns to scale. 
B)  there are increasing returns to scale. 
C)  there are decreasing returns to scale. 
D)  the marginal product of labour is increasing in the amount of labour input. 
E)  the marginal product of labour is decreasing in the amount of labour input. 
A)  there are constant returns to scale. 
B)  there are increasing returns to scale. 
C)  there are decreasing returns to scale. 
D)  the marginal product of labour is increasing in the amount of labour input. 
E)  the marginal product of labour is decreasing in the amount of labour input.

Question 11

A dynamic decision is one that

Accepted Answer

A)  is made very quickly. 
B)  involves only the present. 
C)  involves only the future. 
D)  involves planning over more than one time period. 
E)  involved planning over exactly two time periods. 
A)  is made very quickly. 
B)  involves only the present. 
C)  involves only the future. 
D)  involves planning over more than one time period. 
E)  involved planning over exactly two time periods.

Question 12

Perfect complements will have

Accepted Answer

A)  straight line indifference curves. 
B)  reverse L-shaped indifference curves. 
C)  L-shaped indifference curves. 
D)  curved indifference curves, bowed in from the origin. 
E)  curved indifference curve, bowed out from the origin. 
A)  straight line indifference curves. 
B)  reverse L-shaped indifference curves. 
C)  L-shaped indifference curves. 
D)  curved indifference curves, bowed in from the origin. 
E)  curved indifference curve, bowed out from the origin.

Question 13

Constant returns to scale means that,given any constant x > 0,

Accepted Answer

A) xY = zF(xK, xNd). B) xY > zF(xK, xNd). C) xY < zF(xK, xNd). D) xY = ZxF(K, Nd). E) xY = xzF(xF, xNd). A) xY = zF(xK, xNd). B) xY > zF(xK, xNd). C) xY < zF(xK, xNd). D) xY = ZxF(K, Nd). E) xY = xzF(xF, xNd).

Question 14

With consumption on the vertical axis and leisure on the horizontal axis,the slope of the budget line is equal to

Accepted Answer

A)   
B)   
C)   
D)   
E)   
A)   
B)   
C)   
D)   
E)

Question 15

The following question(s) deal with the Widget Company, which produces widgets. Widgets are produced according to:
  
-The marginal product of the second widget worker hired is

Accepted Answer

A)  2. 
B)  8. 
C)  10. 
D)  12. 
E)  22. 
A)  2. 
B)  8. 
C)  10. 
D)  12. 
E)  22.

Question 16

We assume that the representative consumer's preferences exhibit the properties that

Accepted Answer

A)  they be convex and that more is always preferred to less. 
B)  more is always preferred to less and that each consumer has one strictly favorite good. 
C)  each consumer has one strictly preferred good and that consumption and leisure are both normal goods. 
D)  that consumption and leisure are both normal goods and that the consumer likes diversity in his or her consumption bundle. 
E)  more is always preferred to less and that consumers do not like diversity in his or her consumption bundle. 
A)  they be convex and that more is always preferred to less. 
B)  more is always preferred to less and that each consumer has one strictly favorite good. 
C)  each consumer has one strictly preferred good and that consumption and leisure are both normal goods. 
D)  that consumption and leisure are both normal goods and that the consumer likes diversity in his or her consumption bundle. 
E)  more is always preferred to less and that consumers do not like diversity in his or her consumption bundle.

Question 17

In practice,

Accepted Answer

A)  taxes are not lump sum taxes. 
B)  real wages affect the level of lump sum taxes. 
C)  the quantity of profits that the consumer received is dictated by lump sum taxes. 
D)  lump sum taxes affect the effective prices that consumers face in the market. 
E)  taxes have no distortionary effect. 
A)  taxes are not lump sum taxes. 
B)  real wages affect the level of lump sum taxes. 
C)  the quantity of profits that the consumer received is dictated by lump sum taxes. 
D)  lump sum taxes affect the effective prices that consumers face in the market. 
E)  taxes have no distortionary effect.

Question 18

"More is always preferred to less" refers to

Accepted Answer

A)  choices between work and leisure. 
B)  choices between happiness and utility. 
C)  choices between consumption and work. 
D)  choices between consumption and leisure. 
E)  more consumption and less leisure. 
A)  choices between work and leisure. 
B)  choices between happiness and utility. 
C)  choices between consumption and work. 
D)  choices between consumption and leisure. 
E)  more consumption and less leisure.

Question 19

What are income and substitution effects? What are the income and substitution effects from an increase in the real wage?

Accepted Answer

The income effect is the effect that a c

Question 20

In the production function,Y = zF(K,Nd),total factor productivity is

Accepted Answer

A)  Y/K. 
B)  Y/ Nd. 
C)  F/Y. 
D)  z. 
E)  Y/Z. 
A)  Y/K. 
B)  Y/ Nd. 
C)  F/Y. 
D)  z. 
E)  Y/Z.

When consumers act as price-takers,we say that they behave

A good is normal for a consumer if

A utility function

A utility function

That indifference curves are bowed in toward the origin

Of the following,which is the least likely example of an increase in total factor productivity?

The time constraint for the consumer is

A consumer is said to be indifferent between two consumption bundles

That indifference curves are downward sloping

The construct of a representative firm is most helpful in describing the behavior of all of the firms in the economy when

A dynamic decision is one that

Perfect complements will have

Constant returns to scale means that,given any constant x > 0,

With consumption on the vertical axis and leisure on the horizontal axis,the slope of the budget line is equal to

The following question(s) deal with the Widget Company, which produces widgets. Widgets are produced according to: -The marginal product of the second widget worker hired is

We assume that the representative consumer's preferences exhibit the properties that

In practice,

"More is always preferred to less" refers to

What are income and substitution effects? What are the income and substitution effects from an increase in the real wage?

In the production function,Y = zF(K,Nd),total factor productivity is

Introduction

Measurement

Business Cycle Measurement

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters

Exam 4: Consumer and Firm Behavior: The Work–Leisure Decision and Profit Maximization

When consumers act as price-takers,we say that they behave

A good is normal for a consumer if

A utility function

A utility function

That indifference curves are bowed in toward the origin

Of the following,which is the least likely example of an increase in total factor productivity?

The time constraint for the consumer is

A consumer is said to be indifferent between two consumption bundles

That indifference curves are downward sloping

The construct of a representative firm is most helpful in describing the behavior of all of the firms in the economy when

A dynamic decision is one that

Perfect complements will have

Constant returns to scale means that,given any constant x > 0,

With consumption on the vertical axis and leisure on the horizontal axis,the slope of the budget line is equal to

The following question(s) deal with the Widget Company, which produces widgets. Widgets are produced according to: -The marginal product of the second widget worker hired is

We assume that the representative consumer's preferences exhibit the properties that

In practice,

"More is always preferred to less" refers to

What are income and substitution effects? What are the income and substitution effects from an increase in the real wage?

In the production function,Y = zF(K,Nd),total factor productivity is

Introduction

Measurement

Business Cycle Measurement

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters